12/17/12
The Dow lost 36-points on Friday, as a late afternoon sell-off took the indices from modest gains to modest losses for the week.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 153"]
[/TABLE]
[TABLE="width: 134"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]0.0043%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]0.08%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]-0.41%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]-0.18%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]0.15%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
For more on the weekly and current annual returns, please see this weekend's TSP Talk Weekly Wrap Up.
After Wednesday's negative reversal day, the S&P 500 pulled back on Thursday and Friday and is now testing the 20 and 50-day EMAs. The trouble is, the over head resistance held on the first attempt, and late last week we saw a breakdown from a rising wedge pattern. That's not exactly encouraging for the bulls so the 20 and 50-day EMAs will have to hold to negate this wedge breakdown.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
What a difference a couple of days makes. The Nasdaq 100 was looking very nice after last Tuesday as a clean bullish inverted head and shoulders pattern was testing the neckline. Then Apple tumbled and took the Naz 100 with it. It closed just below the 200-day EMA, but there is some support using the short-term parallel channel created by recent highs and lows.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Apple may be the deciding factor for the Nasdaq indices. It is now testing some long-term support and it could get at least a temporary bounce here, but that large head and shoulders pattern is not a great sign. There is also a large gap open down near 420 so a breakdown from the H&S could easily turn into a move down to that level.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
If the head and shoulders pattern decides to test the middle of the head again, Apple could hit 600-650 again, so this neckline holding is crucial.
The Dow Transportation Index moved above the important 5200 level 4 times last week, only to see it close back down below each time. That's 4 consecutive negative reversal days.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
That is pretty good resilience as a negative reversal day usually follows through on the down side, but the Transports have held so far. It could be a bull flag, or it could be a negative flat top, so if the buyers don't step up and hold 5200 into the close soon, the bears will likely take control.
After today there are only 5 trading days before Christmas. Normally a pretty strong time for stocks, but the real seasonal strength will kick in next week - the week between Christmas Day and New Years Day.
Chart provided courtesy of www.sentimentrader.com
The fiscal cliff negotiations continued this weekend and there were some encouraging developments, but nothing concrete. It may be enough to give stocks some temporary relief until the next headline come out.
As we talked about on Friday, we have to be concerned with the potential for sellers to put the pressure on during the end of December because of the coming increase to the capital gains tax in 2013. This hasn't happened since the end of 1986 / beginning of 1987, the last time capital gains were increased, and we saw a lot of weakness at the end of December in '86, but stocks saw a huge rally in January of 1987 once the cap gains selling ended. I'm not sure if that is what will happen this year, but it's something to keep in mind.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
The Dow lost 36-points on Friday, as a late afternoon sell-off took the indices from modest gains to modest losses for the week.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 153"]
[/TABLE]
[TABLE="width: 134"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]0.0043%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]0.08%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]-0.41%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]-0.18%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]0.15%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
For more on the weekly and current annual returns, please see this weekend's TSP Talk Weekly Wrap Up.
After Wednesday's negative reversal day, the S&P 500 pulled back on Thursday and Friday and is now testing the 20 and 50-day EMAs. The trouble is, the over head resistance held on the first attempt, and late last week we saw a breakdown from a rising wedge pattern. That's not exactly encouraging for the bulls so the 20 and 50-day EMAs will have to hold to negate this wedge breakdown.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
What a difference a couple of days makes. The Nasdaq 100 was looking very nice after last Tuesday as a clean bullish inverted head and shoulders pattern was testing the neckline. Then Apple tumbled and took the Naz 100 with it. It closed just below the 200-day EMA, but there is some support using the short-term parallel channel created by recent highs and lows.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Apple may be the deciding factor for the Nasdaq indices. It is now testing some long-term support and it could get at least a temporary bounce here, but that large head and shoulders pattern is not a great sign. There is also a large gap open down near 420 so a breakdown from the H&S could easily turn into a move down to that level.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
If the head and shoulders pattern decides to test the middle of the head again, Apple could hit 600-650 again, so this neckline holding is crucial.
The Dow Transportation Index moved above the important 5200 level 4 times last week, only to see it close back down below each time. That's 4 consecutive negative reversal days.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
That is pretty good resilience as a negative reversal day usually follows through on the down side, but the Transports have held so far. It could be a bull flag, or it could be a negative flat top, so if the buyers don't step up and hold 5200 into the close soon, the bears will likely take control.
After today there are only 5 trading days before Christmas. Normally a pretty strong time for stocks, but the real seasonal strength will kick in next week - the week between Christmas Day and New Years Day.
Chart provided courtesy of www.sentimentrader.com
The fiscal cliff negotiations continued this weekend and there were some encouraging developments, but nothing concrete. It may be enough to give stocks some temporary relief until the next headline come out.
As we talked about on Friday, we have to be concerned with the potential for sellers to put the pressure on during the end of December because of the coming increase to the capital gains tax in 2013. This hasn't happened since the end of 1986 / beginning of 1987, the last time capital gains were increased, and we saw a lot of weakness at the end of December in '86, but stocks saw a huge rally in January of 1987 once the cap gains selling ended. I'm not sure if that is what will happen this year, but it's something to keep in mind.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
